NNU: Potential Sale of CHS Dogged by Extraordinary Labor Unrest

OAKLAND, Calif., Sept. 30, 2016 /PRNewswire-USNewswire/ -- Community Health Systems' ("CHS") has underperformed for its investors, patients and nurses. As a result, representatives from CHS recently confirmed that the company is in conversation with interested parties for a partial or complete sale of the company. To further compound the instability, CHS faces more challenges from the federal government that could have both an economic and regulatory impact on any successor entity.

A new massive complaint was issued last week by the National Labor Relations Board ("NLRB") against CHS and, for the first time was issued against, CHS spin-off, Quorum Health Corporation ("QHC"). The complaint, consolidates 11 charges, covering 50 unfair labor practices, filed against CHS, and is now naming QHC as the successor.

Another example of QHC being held responsible for the actions of CHS is the federal injunction issued by the U.S. District Court in Los Angeles. The injunction orders QHC-owned Barstow Community Hospital to cease and desist its flagrant violations of the collective bargaining rights of its registered nurses.

Finally, the single employer trial against CHS continues and is expected to last until the summer of 2017. The Labor Board could order a remedy against the company affecting operations in all of its hospitals throughout the country. The NLRB has recently concluded hearings in the West Virginia phase of a multi-state trial for multiple and repeated alleged labor violations at seven hospitals owned by Community Health Systems (CHS) including BRMC in Bluefield and Greenbrier Valley Medical Center (GVMC) in West Virginia. This trial marks the first time that CHS will be tried as the parent company for labor violations at its hospitals under either the "single employer," or "joint employer" doctrines of the NLRB.

Remedies ordered in the single-employer trial could be applied to all CHS-owned facilities nationwide, and could become the responsibility of successor owners. Any sale complete or partial sale of CHS facilities will have to deal with this issue. The Board remedy could include federal regulation in the operations and management of all of the facilities.